That Story You've Read About YouTube 'Blocking' Indie Artists... Yeah, That's Not Accurate

from the a-bit-of-spin-and-you-can-make-anything-look-evil dept

As you may have heard, there's been some hubbub this week about claims that YouTube is going to remove some videos from indie musicians/labels who don't agree to the contract terms for YouTube's upcoming music subscription service. Ellen Huet, over at Forbes, has a good article explaining how this isn't as dire as some are making it out to be, but the more I'm digging into it, it seems even less than that. There's no doubt that this is a royalty dispute, with some indie labels upset about the basic terms that Google is offering, but, if you haven't noticed, the complaints seem to be coming from the same folks who complain about the royalty rates of every single online music service. There are some people who will just never be satisfied. Furthermore, the deeper you dig into this, it becomes quite clear that any artist who wants to have their videos on YouTube can continue to do that.

Here's the main issue: YouTube, which has long been the most popular place for people to find and listen to music, is about to launch some sort of premium subscription service. This has been rumored for ages, and it's expected to build a Spotify-like service on top of YouTube's existing content. As part of this, YouTube is going around and negotiating royalty deals with labels and artists, most of which have signed on. This is providing a new revenue stream to those artists. Currently, for artists on YouTube, they're only able to make a cut of advertising revenue (which isn't that much) via YouTube's Partner program. By launching a premium subscription service, YouTube is adding a brand new revenue stream, which by all accounts will pay noticeably better than the current partner offering. Just as Spotify pays more to artists when a "subscriber" streams a song than when an ad-supported user streams a song, it appears that YouTube will do the same.

Now, the one big sticking point is the removal of certain videos. While Huet points out that there are very, very few videos likely to be impacted by this, it is likely to still hit a few. And, that's why it's quite reasonable to look at that and have the gut reaction: "that's bullying" or "that's unfair." It's even easier to try to spin it, as some critics have, as Google threatening people who don't agree to the royalties that it's offering. But where things appear to have been muddied is in understanding what is meant by "removing" the videos. As far as we can tell, Google is just saying it will remove those videos from its partner program. YouTube is an open platform. Anyone can go and upload videos for free. Any musician who wants their video on the platform can do so for free. However, for videos that are already in the partner program, if they reject the new deal (which, again, is better than the existing deal), Google will no longer have a license to host that video as a part of its partner program, so that copy may be removed because the artist has effectively pulled its license from YouTube to host it. The musicians and labels can still go back and re-upload their own videos -- it's just that they've chosen not to monetize the video at all by joining the partner program. You could argue that Google could just "move" the video from the partner program to outside the partner program, but then these same folks would probably try to spin it as Google infringing on their copyrights by hosting their videos without a license...

Put yourself in the shoes of the indie band here. Under the existing system, you can "monetize" your videos by getting a cut of the tiny ad revenue that comes in from each view. From what everyone says, unless you're absolutely huge, the money just isn't that great. Such is the nature of online advertising these days. But the new offering gives you a cut of subscription revenue also, which is likely to be higher. So, now, as an indie band, the options are: take Google's music streaming deal, which is better than the crappy ad share deal you're currently getting or... have your video removed from YouTube's partner program.

In short: before, you had two options:

1. Post your video and monetize it via YouTube's partner program with a bit of ad revenue.
2. Post your video and don't monetize it.

And now you'll have these two options:

1. Post your video and monetize it via YouTube's partner program with a bit of ad revenue and some subscription revenue
2. Post your video and don't monetize it.

And, somehow, the same folks who complain about every music service are spinning this second option as some sort of insult, even though it's better than the existing options. It takes some kind of special level of bullshit to argue that a company offering to improve your deal is doing something bad.

Sure, perhaps it's fair game to argue that the new deal isn't good enough for a subscription service, but it's difficult to see how acts are complaining that their videos will be taken out of the partner program when the existing deal is even worse. So, basically, Google is offering these labels a better deal than before, and it's being attacked because it's removing the option for the old not so good deal. It's a little difficult to see how that's a fair complaint. After all, YouTube has given these artists a massive, powerful and robust platform to put their videos up for free with no bandwidth costs at all, and even given them a variety of monetization options, from ad shares to linking people to buy MP3s and such. And now it's removing one option while adding a better paying option... But a few indie labels are spinning it negatively because they want an even better deal. And maybe the royalty rates they want are justified. But to present this as somehow hurting those indie artists just seems to be pure spin.

Hell, go back to the time before YouTube, and think about the deal that indie artists had if they wanted to put videos online? They would have to pay through the nose for something like a Real Video Server, then pay for all the bandwidth, and then know that it was still almost impossible for anyone to watch the video. Then YouTube came along and made it both easy and free for anyone to put their videos online, plus build a large community of people who want to watch those videos, and then added ways to monetize those videos. Now, YouTube is adding another way to monetize those videos even more, and the artists are suddenly claiming it's an attack on them? Yikes.

Filed Under: blocking, indie artists, partner program, reporting, royalties, subscription service, youtube
Companies: google, youtube

Major Labels Under Antitrust Investigation

from the yet-again dept

Apparently the Justice Department is suddenly worried that the four major record labels are colluding in creating a new online music subscription service. The last time this happened was back when the record labels tried to (wait, this sounds familiar) create online music subscription services -- which were universally panned, rarely used and eventually shut down. So, even if the labels are colluding, given their strategic vision, it seems rather unlikely that they're going to leverage their position to dominate the market. They certainly could hold back other services -- but it seems like they've been doing that for years already, just with their own shortsightedness.

Filed Under: antitrust, collusion, justice department, labels, riaa, subscription service
Companies: riaa